Appeal

On November 27, 2000, CSD filed an appeal that made the following claims:

CSD's case has not been clear and convincing.18 However, after reviewing the record we modify the POD at pages 5-7 to find that at least 43,992 California consumers were crammed to reflect the number of credits made by OAN. We also modify the POD at page 7 to reflect CSD's assertion that over 43,992 California consumers were crammed.

In support of the contention that Accutel's conduct was worse than negligent, the appeal cites a letter from OAN to Accutel suspending provision of billing services for excessive complaints. This single letter is not sufficient to make a finding that Accutel's conduct was "volitional, systematic, performed with knowledge and indifference to the consequences."

Regarding the decrease in cramming after January 1999, CSD contends that "only Accutel's self-serving testimony ... would sustain the POD's view of Accutel's cramming." However, CSD's appeal does not provide any citation to testimony or briefs to contest Accutel's position concerning decrease in cramming in 1999. However, in its appeal, CSD provides for the first time an alternate explanation to Accutel's theory for the reduction in cramming complaints recorded by Pacific. In its appeal, CSD attributes the decrease in incidents of cramming to the termination of the bill processing contract between OAN and Accutel. After reviewing the record, we make no change to the POD on this point.

CSD's position that substantial public harm resulted from Accutel's cramming is inconsistent with the evidence staff presented at hearings. In addition to CSD's evidence that cramming complaints decreased, CSD sponsored consumer witnesses that testified they had received refunds for erroneous charges. CSD's own appeal states that as the "POD correctly observes, many consumers were credited." However, we do agree with CSD that as a general proposition cramming is a public harm and an inconvenience to the public, and we have modified the POD consistent with that proposition.

CSD states that it "advanced clear and convincing proof of Accutel's California slamming." The clear and convincing proof that CSD refers to are simply arguments stating that Accutel did not provide documents (verification records and customer information) to CSD.

CSD's Appeal concerning slamming fails on several grounds. As discussed earlier in today's decision, the record shows that of the 168 consumers CSD interviewed, only 34 asserted slamming violations. It does not logically follow that because CSD has identified incidents of slamming that all of Accutel's customers have been slammed. CSD's argument that the record does not contain customer verifications records also lacks merit since, as discussed earlier, CSD chose not to use discovery tools such as motions to compel and insisted on precluding Accutel from potentially presenting such exonerating evidence at hearing.

Lastly, contrary to CSD's assertion, the record developed by CSD does not justify revocation. However, we will increase the penalty based on the revised incidents of cramming found.

Findings of Fact

1. Accutel billed at least 43,992 California consumers for products or services not ordered or authorized by consumers.

2. Consumers were reimbursed for erroneous charges imposed on their phone bills.

3. Accutel switched without authorization the long distance carrier of at least 34 California consumers.

4. Accutel has not timely filed financial reports.

5. Accutel has been negligent in its provision of telecommunication services.

6. Accutel's negligence warrants the imposition of a fine.

Conclusions of Law

1. Placing charges on a person's local telephone bill based on an invalid authorization is unreasonable.

2. Unreasonable practices are prohibited by Pub. Util. Code § 451.

3. A telephone bill may only contain charges for products or services, the purchase of which the subscriber has authorized.

4. Accutel violated Pub. Util. Code § 451.

5. Accutel violated Pub. Util. Code § 2890.

6. Accutel violated Pub. Util. Code § 2889.5.

7. For reasons set forth in the foregoing opinion, Accutel should pay a penalty of $1,520,000. Further, half the penalty should be suspended subject to Accutel demonstrating compliance with laws, and Commission orders, rules and regulations for three years.

8. Accutel should make a compliance filing, within 30 days of the effective date of this decision, with Telecommunications Division showing authority from the Secretary of State to do business in the State of California.

9. This order should be made effective immediately to finally resolve this investigation.

ORDER

IT IS ORDERED that:

1. The September 7, 1999 motion of Consumer Services Division is denied.

2. Accutel Communications, Inc., (U-5865) (Accutel) shall pay a fine of $1,520,000. Half of this fine is suspended by $760,000 subject to Accutel demonstrating compliance with laws, and Commission orders, rules and regulations for three years. CSD may move to end the suspension upon a new violation of law or Commission order, rule or regulation by Accutel. After three years of full compliance and upon motion by Accutel, we will vacate the balance of the fine. Within 30 days of the effective date of this order, Accutel shall submit to the Manager of the Commission's fiscal office a certified check in the amount of $760,000 payable to the State of California General Fund.

3. Within 30 days of the effective date of this order, Accutel shall make a compliance filing with Telecommunications Division showing authority from the Secretary of State to do business in the State of California.

4. The Commission's General Counsel shall take all reasonable steps to collect the fine imposed by this order. All fines collected will be deposited in the State's General Fund.

5. In the event that Accutel fails to comply with Ordering Paragraphs 2 and 3, the Executive Director shall issue an order suspending Accutel's Certificate of Public Convenience and Necessity, and shall take all necessary steps to ensure that Accutel ceases doing business in California, including but not limited to directing all California local exchange carriers and billing agents to cease doing business with Accutel.

6. Accutel shall obey and comply with all laws and all orders and rules of the Commission, as applicable to Accutel's billing activity and provision of telephone service in California.

7. This proceeding is closed.

This order is effective today.

Dated July 17, 2002, at San Francisco, California.

18 We observe that CSD initially presented different versions of the same exhibits to the ALJ and opposing counsel. CSD also precluded Accutel's counsel from participating in the deposition of a key witness (Evans), which later required the ALJ to postpone start of evidentiary hearings on August 27, to provide Accutel an opportunity to depose the witness.

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